Hurt by the economic and housing market downturns, the recreational boating industry will
rebound by 2016 based on greater disposable incomes and pent-up demand.

Economic downturn decimates
boating industry

The recreational boating industry was
decimated by the economic and housing
market downturns that began in 2007,
because boating products are luxury
items and the market depends on
consumer spending and access to credit.
The effects of the slowdown included
rising unemployment, sharp declines in
house values, and deterioration of the
broader financial markets. For the US
boating industry, these factors combined
to not only reduce consumer spending
and the ability of individuals to secure
credit for boats, but also meant that
many boat dealers and boatbuilders had
difficulty funding operations, with the
result being a number of bankruptcies
among industry suppliers and dealers.

US market to increase 8%
annually through 2016

By 2016, the recreational boating market
(including boats, propulsion systems,
and accessories) is forecast to rebound,
with demand increasing 8.0 percent per
year to $10.1 billion. The market will be
driven by gains in consumer spending
and disposable income and the rising
strength of the financial sector. The
boating industry’s efforts to expand the
boating market to women and minorities
will also boost sales of entry level boats.
Growth in the 55-64 age bracket will
support demand, since boat purchases
become more likely near the onset of
retirement (although they tend to decline
shortly thereafter). Despite the rapid
sales growth, the market in 2016 will be
only about two-thirds of what it was in
2006, and is not expected to recover to
the pre-downturn levels for the foreseeable
future.

Traditional powerboats to
present fastest growth

Demand for traditional powerboats will
post the fastest gains, rebounding from
especially sharp declines beginning in
2008 as credit conditions made financing
expensive boats difficult. This segment
will be supported by pent-up demand
from consumers who delayed purchases
during the downturn, as well as strong
demand for larger, more expensive
boats. Powerboat demand will also be
fueled by technological advances, such
as newer propulsion systems and controls
that simplify handling.

South to remain largest
regional market

The West will see the fastest increases
in recreational boating demand of the
four US census regions. Growth will be
aided by above average gains in the 45
or older population segment and by rapid
increases in both regional GDP and consumer
spending. The South will also see
above average growth in recreational
boating product demand and will remain
the largest regional market through
2016. In addition to demographic and
economic factors driving gains, boating
demand in the South will continue to be
aided by the region’s mild climate, long
warm water coastline, and the popularity
of boating and fishing in the region.